Real Shock From Trade Has Yet to Come to the Euro Area
Slower exports largely explained weaker euro-area growth last year, but a close inspection of the data by Bloomberg Economics shows the trade war between the U.S. and China only had a small direct impact -- instead it was due to the U.K. and Turkey. Souring global sentiment is mostly to blame for the latest deterioration in the economic outlook. Is there more to come? Quite possibly -- a pivot toward tariffs on Europe’s auto makers or a disruptive hard Brexit would deal exporters a heavy blow.
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